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Market making is a fundamental trading problem in which an agent provides liquidity by continually offering to buy and sell a security. The problem is challenging due to inventory risk, the risk of accumulating an unfavourable position and…

Artificial Intelligence · Computer Science 2018-04-13 Thomas Spooner , John Fearnley , Rahul Savani , Andreas Koukorinis

Reinforcement learning (RL) algorithms have been around for decades and employed to solve various sequential decision-making problems. These algorithms however have faced great challenges when dealing with high-dimensional environments. The…

Machine Learning · Computer Science 2020-04-01 Thanh Thi Nguyen , Ngoc Duy Nguyen , Saeid Nahavandi

Effective cross-functional coordination is essential for enhancing firm-wide profitability, particularly in the face of growing organizational complexity and scale. Recent advances in artificial intelligence, especially in reinforcement…

Artificial Intelligence · Computer Science 2025-10-07 Jinyang Jiang , Jinhui Han , Yijie Peng , Ying Zhang

In this paper, we propose cautious policy programming (CPP), a novel value-based reinforcement learning (RL) algorithm that can ensure monotonic policy improvement during learning. Based on the nature of entropy-regularized RL, we derive a…

Machine Learning · Computer Science 2022-01-19 Lingwei Zhu , Toshinori Kitamura , Takamitsu Matsubara

This paper studies the continuous-time reinforcement learning (RL) for optimal switching problems across multiple regimes. We consider a type of exploratory formulation under entropy regularization where the agent randomizes both the timing…

Optimization and Control · Mathematics 2025-12-23 Yijie Huang , Mengge Li , Xiang Yu , Zhou Zhou

Autocurricular training is an important sub-area of multi-agent reinforcement learning~(MARL) that allows multiple agents to learn emergent skills in an unsupervised co-evolving scheme. The robotics community has experimented autocurricular…

Artificial Intelligence · Computer Science 2023-05-09 Boling Yang , Liyuan Zheng , Lillian J. Ratliff , Byron Boots , Joshua R. Smith

This research develops a sentiment-driven quantitative trading system that leverages a large language model, FinGPT, for sentiment analysis, and explores a novel method for signal integration using a reinforcement learning algorithm, Twin…

Computational Finance · Quantitative Finance 2025-10-14 Wo Long , Wenxin Zeng , Xiaoyu Zhang , Ziyao Zhou

In a typical e-commerce setting, Content Ranking Optimization (CRO) mechanisms are employed to surface content on the search page to fulfill customers' shopping missions. CRO commonly utilizes models such as contextual deep bandits model to…

Machine Learning · Computer Science 2024-08-09 Zhou Qin , Kai Yuan , Pratik Lahiri , Wenyang Liu

Reinforcement learning (RL) is a powerful machine learning technique that enables an intelligent agent to learn an optimal policy that maximizes the cumulative rewards in sequential decision making. Most of methods in the existing…

Machine Learning · Statistics 2023-01-06 Chengchun Shi , Zhengling Qi , Jianing Wang , Fan Zhou

With the development of artificial intelligence technology, quantitative trading systems represented by reinforcement learning have emerged in the stock trading market. The authors combined the deep Q network in reinforcement learning with…

Statistical Finance · Quantitative Finance 2021-12-01 Yizhuo Li , Peng Zhou , Fangyi Li , Xiao Yang

Value-based reinforcement learning (RL) methods like Q-learning have shown success in a variety of domains. One challenge in applying Q-learning to continuous-action RL problems, however, is the continuous action maximization (max-Q)…

Machine Learning · Computer Science 2020-03-03 Moonkyung Ryu , Yinlam Chow , Ross Anderson , Christian Tjandraatmadja , Craig Boutilier

The autonomous trading agent is one of the most actively studied areas of artificial intelligence to solve the capital market portfolio management problem. The two primary goals of the portfolio management problem are maximizing profit and…

Trading and Market Microstructure · Quantitative Finance 2019-09-10 Wonsup Shin , Seok-Jun Bu , Sung-Bae Cho

Reinforcement learning (RL) shows great potential in sequential decision-making. At present, mainstream RL algorithms are data-driven, which usually yield better asymptotic performance but much slower convergence compared with model-driven…

Machine Learning · Computer Science 2024-02-27 Yang Guan , Jingliang Duan , Shengbo Eben Li , Jie Li , Jianyu Chen , Bo Cheng

We develop a deep reinforcement learning (RL) framework for an optimal market-making (MM) trading problem, specifically focusing on price processes with semi-Markov and Hawkes Jump-Diffusion dynamics. We begin by discussing the basics of RL…

Computational Finance · Quantitative Finance 2025-03-03 Luca Lalor , Anatoliy Swishchuk

Optimal Order Execution is a well-established problem in finance that pertains to the flawless execution of a trade (buy or sell) for a given volume within a specified time frame. This problem revolves around optimizing returns while…

Computational Finance · Quantitative Finance 2026-01-13 Khabbab Zakaria , Jayapaulraj Jerinsh , Andreas Maier , Patrick Krauss , Stefano Pasquali , Dhagash Mehta

Reinforcement learning (RL) has re-emerged as a natural approach for training interactive LLM agents in real-world environments. However, directly applying the widely used Group Relative Policy Optimization (GRPO) algorithm to multi-turn…

Machine Learning · Computer Science 2026-01-27 Junbo Li , Peng Zhou , Rui Meng , Meet P. Vadera , Lihong Li , Yang Li

Cryptocurrency is a cryptography-based digital asset with extremely volatile prices. Around USD 70 billion worth of cryptocurrency is traded daily on exchanges. Trading cryptocurrency is difficult due to the inherent volatility of the…

Computational Finance · Quantitative Finance 2024-12-12 Hongshen Yang , Avinash Malik

The realm of High-Frequency Trading (HFT) is characterized by rapid decision-making processes that capitalize on fleeting market inefficiencies. As the financial markets become increasingly competitive, there is a pressing need for…

Trading and Market Microstructure · Quantitative Finance 2023-11-21 Soumyadip Sarkar

Deep reinforcement learning (RL) has achieved outstanding results in recent years, which has led a dramatic increase in the number of methods and applications. Recent works are exploring learning beyond single-agent scenarios and…

Computer Science and Game Theory · Computer Science 2020-02-03 Yunlong Lu , Kai Yan

While research of reinforcement learning applied to financial markets predominantly concentrates on finding optimal behaviours, it is worth to realize that the reinforcement learning returns $G_t$ and state value functions themselves are of…

Statistical Finance · Quantitative Finance 2024-05-21 Colin D. Grab